Otedola’s Zenon:Strategic Opportunities and Investments – By Emeka Chiakwelu

Posted by admin Articles, Columnists, Emeka Chiakwelu, NNP Columnists Monday, September 3rd, 2012

By Emeka Chiakwelu | NNP | Sept. 3, 2012 – Zenon Petroleum and Gas needs to make strategic move into oil exploration
and petroleum refinery

Femi Otedola has taken Zenon Petroleum and Gas to its greater heights in
the area of petroleum products marketing and distribution. As the
president and chief executive officer, he has accomplished tremendous task
of making Zenon a household name in Nigeria and beyond.

The global respected capitalistic and flagship journals including Forbes
magazine and Wall Street Journal have noted the growth and stellar
achievements of Zenon Petroleum & Gas Limited. And Mr. Otedola has been
recognized and noted as among the new crop of business executives in the
global emerging economies. Otedola was not alone in this recognition, many
of African business executives including Aliko Dangote, Nicky Oppenheimer
and many others are also in that category.

Zenon Petroleum & Gas can play a vital role in oil and gas industry
especially in the areas necessary for Nigerias economic growth. Beyond
its primary role of marketing and distribution of petroleum products,
Zenon can get involved in exploration and refining of oil and gas in
Nigeria. With the level of expertise and technology Zenon has acquired
over the years, it should be a leap forward for the company to diverse
into oil refining.

Zenon has what it takes to make a strategic move in exploration and
refining of oil and gas in Nigeria. There are many opportunities in the
energy industry especially in oil refining at this point in time. Lately,
Nigeria has been having problems with oil subsidy issue with deepening
subsidy scandal. All these would have been averted with functioning
ingenious oil refineries. The country’s state of affairs can be
attributed to the poor and under performances of local oil refineries.
With increasing refined oil importation, precious and needed foreign
exchanges in billions of dollars are transferred abroad, simultaneously
breeding corruption, scandal and cronyism.

Nigeria must encourage local companies to take advantage of the
opportunities in the energy industry especially in petroleum refining. It
is important that private industries in Nigeria to participate in this
industry for needed energy availability. First and foremost, it will bring
jobs to our unemployed and underemployed work force. Private industries
are more efficient than government in operating business entities due to
lack of crony capitalism, in addition massive inefficiency is associated
with government run companies.

One can successful argue that if the Kaduna and Port Harcourt refineries
were private owned, they would have been more efficiently managed and even
profitable. This is why that it is important that local companies like
Zenon should step in with its expertise in sound management and show how
it is done.

Nigerias answer to the shortage of refined petroleum is to increase the
number of indigenous refineries. Zenon can diverse in the energy industry
and get into oil refinery. It will be natural path to be taken when it
decides to take advantage of the strategic opportunities in oil refinery.

Femi Otedola has already shown his business capability and acumen in the
way he took Zenon and made it a trusted, prompt and reliable entity.
Otedole is a strategic asset because he understood oil and gas industry
and he is a globally recognized top manager. His expertise and experience
can be a powerful check on the underlying risk of oil refinery and
exploration.

Refinery and exploration of petroleum are high capital intensive
especially in Africa, where sources of finance are limited.
Notwithstanding, the environment for raising capital are progressively
getting better. Many foreign entities and financial institutions can
partner with local companies that are promising. Therefore Zenon can
breakthrough because it a globally recognized entity that has shown good
prospect and positive balance sheet.

Another major source of raising money is to go public and Nigeria Stock
Exchange is becoming a meaningful capital market for raising capital for
companys growth. Otedolas Zenon should take the advantage in oil
exploration and refinery as a diversification pathway for strategic growth
and development.

Emeka Chiakwelu, Analyst and Principal Policy Strategist at Afripol
Organization. Africa Political and Economic Strategic Center (Afripol) is
foremost a public policy center whose fundamental objective is to broaden
the parameters of public policy debates in Africa. To advocate, promote
and encourage free enterprise, democracy, sustainable green environment,
human rights, conflict resolutions, transparency and probity in Africa.
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